RTTNews - The Australian market opened weak on Wednesday as participants pressed sales across various sectors amid fears that a global economic recovery is still some way off. Weak oil and base metal prices and the negative close on Wall Street on the back of some weak economic reports are hurting sentiment to a significant extent.

The Australian benchmark index S&P/ASX 200 is currently down by 46 points at 3,917. The broader All Ordinaries index is trading at 3,913, down nearly 45 points from its previous close.

On Tuesday, the S&P/ASX 200 index had ended lower by 69.20 points or 1.72% at 3,963. The All Ordinaries index closed 72.50 points or 1.8% down at 3,958.

Energy and materials stocks are trading weak. Financials and industrials are also seen exhibiting weakness. Select consumer staples, healthcare, telecommunications and utilities stocks are surging higher.

Rio Tinto is plunging sharply and is down by over 21%. The company had sent letters to shareholders regarding a forthcoming rights issue in the ratio of 21:40 at a price of A$28.29 for each new Rio Tinto share. The record date for determining the eligibility of shareholders for the entitlement has been fixed as 22 June 2009.

OZ Minerals has announced that the settlement of the sale of certain assets to China Minmetals Non-Ferrous Metals Co. Ltd is now complete. Total proceeds amounted to US$1,354 million after settlement adjustments. As a consequence, all of OZ Minerals' bank loan facilities have been repaid in full and the company will have a cash balance following completion in excess of US$575 million.

OZ Minerals has US$105 million of convertible bonds and fully secured bank letters of credit of approximately A$20 million, principally to meet the company's mining regulatory obligations. The OZ Minerals stock is currently trading lower by 1.6%.

In another news, Asciano Group says it has increased the size of its capital raising to A$2.35 billion, following the successful completion of its institutional component. Asciano said it had raised A$1.922 billion committed from institutional investors, including A$341 million from an entitlement offer, A$231 million from an unconditional placement, and A$1.35 billion from a conditional placement. The stock is currently trading down by as much as 30%.

In economic news, the Australian Bureau of Statistics will release the data on Dwelling Starts for the March quarter. The Westpac-Melboure Institute Indices of Economic Activity for April will also be released this morning.

Crude oil prices gave back early gains and finished lower for a third straight session. Oil fell as a drop in global equities raised concerns about the economy and the impact on energy demand. Light sweet crude oil for July delivery dropped to US$70.47, down 15 cents for the session. After hitting as high as US$72.77 early, prices touched as low as US$69.80, dipping below US$70 for the second straight session.

In the currency market, the Australian dollar opened lower after a weak finish on U.S. equity markets caused the currency to give up earlier gains in offshore trading. In early trading on Wednesday, the Australian dollar was trading at US$0.7931/36, down from Tuesday's close of $US0.7943/45. Currently, the Australian dollar is trading at 79.12 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Japan is trading modestly higher. Korea and New Zealand are trading weak with their key indices losing a little over half a per cent from their previous closing levels.

Housing starts rose at a better than expected annual rate, but lower industrial production on the back of a sharp drop in capacity utilization and a decline in core producer prices triggered fairly heavy selling on Wall Street on Tuesday.

The major averages ended the session almost near the day's lows. The Dow closed down by 107.46 points or 1.3 percent at 8,504.67, the Nasdaq closed down by 20.20 points or 1.1 percent at 1,796.18 and the S&P 500 closed down by 11.75 points or 1.3 percent at 911.97.

Stock markets across the Asia Pacific region ended Tuesday's trading on the downside. Japan's benchmark Nikkei 225 Index closed down by 2.9 percent and Hong Kong's Hang Seng finished down by 1.8 percent.

Meanwhile, the major European markets turned in a mixed performance. While the German DAX Index and the U.K.'s FTSE 100 Index both finished just above the unchanged line, the French CAC 40 fell by 0.2 percent on the day.

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